If you have fallen into debt and need help, bankruptcy may be your best option. One of the first steps to financial recovery is learning about the different types of bankruptcy. Each is specifically designed to help consumers and businesses remove the burden of being in debt. Chapter 7 Bankruptcy is the most popular form of bankruptcy, but it is not for everyone. Make sure you discuss with an Orange County bankruptcy attorney as to which options makes the most sense for you, your family, and your future.
- Chapter 7: The most common type of bankruptcy is known as liquidation bankruptcy. When the demands of creditors become overwhelming, Chapter 7 bankruptcy allows consumers and small businesses to remove debt by turning in all non-exempt property. A Chapter 7 bankruptcy allows the filer to have a fresh start, debt-free.
- Chapter 9: Municipality bankruptcy is reserved for cities, towns, and villages that need to restructure.
- Chapter 11: This is the type of bankruptcy most commonly used by large businesses that need to restructure their finances. This type of bankruptcy allows the debtor to control their assets and continue to operate their business. Ideally, the debtor will take this opportunity to improve their business performance so that they will be able to pay off their creditors.
- Chapter 12: Family Farmer bankruptcy allows farmers and fishermen to reorganize their debt.
- Chapter 13: The wage earner’s plan allows individuals with consistent income to present a plan to pay their debts. Chapter 13 laws allow debtors to propose a repayment plan that covers three to five years. Debtors under Chapter 13 are still required to repay their debt, but they can do so in a manner that they can afford.
- Chapter 15: Ancillary cases involve coordination between foreign and United States courts for corporate bankruptcies.
Choosing to file for bankruptcy is a difficult decision that should not be taken lightly. Deciding which bankruptcy is right for you can prove just as challenging. These types of decisions require careful consideration. Please make sure that you consult with an experienced Orange County bankruptcy attorney before making any decisions that could significantly affect your financial future.